One area of opportunity for SaaS vendors that can help them differentiate themselves from their on-premises rivals is the ability to offer services that combine software with other shared resources. It's often the case that software alone falls short of a complete solution to a business pain point, and needs to be supplemented with a shared knowledge base, up-to-date information resources or even online access to live assistants. On-premise vendors supply just the software and then leave their customers to build or source the rest of the solution for themselves. Online vendors can offer the complete solution as an integrated package — and because they have to manage all the components, they have a more pressing incentive to make sure their software does the best possible job of bringing them all together.

A good case in point was launched yesterday by on-demand spend management vendor Ketera. Supplier Connect is the latest weapon in the war waged by procurement managers to get everyone in their organization ordering from approved suppliers. Successive generations of e-procurement have battled two challenges: ease-of-use and breadth of catalog. Ketera made big strides on the ease-of-use front in its release last year, which I wrote about at the time under the heading of The consumerization of enterprise applications. Supplier Connect aims to crack the breadth issue, which in procurement can be summed up as a mirror-image of Pareto's 80:20 rule: you have to bring in the 80% of suppliers that account for the last 20% of your spending — the long tail of the supply chain.

Ketera reduces the overhead of onboarding those smaller suppliers and keeping their information up-to-date by providing a service that automates the entire process, with suppliers able to manage their information through a Web-based dashboard, while giving customers full visibility of supplier compliance. To this, it adds services such as catalog hosting, any-to-any document transformation, supplier profile management, a supplier directory, a rich set of analysis tools and full integration to transactional systems. Analyst (and Enterprise Irregular) Jason Busch has given an expert appraisal on his SpendMatters blog:

"Ketera has not only provided a powerful set of supplier onboarding and management tools — Aravo is probably their only real competitor from a feature/function perspective given the new levels of sophistication Ketera's solution reaches — but also incorporated performance management and business intelligence directly into the process. How does it work? Are you curious about learning the root cause of challenges surrounding the time to go live for suppliers (or simply the average time to go live)? There's a pre-defined report for you. Or what about discovering the percentage of invoice errors your suppliers fire in your direction. You guessed it — the BI and reporting platform that Ketera brings to the table makes it simple."

The attention to detail is exemplified by Supplier Connect's supplier profile management, as illustrated by the BI reporting in the image alongside. The supplier profile maintains information about matters such as eco certification, minority employment and so on, which enterprises often need to record and report on to comply with state and federal regulations. I was intrigued to hear about this, which must be an administrative nightmare for organizations that don't have effective automation in place.

Ketera's masterstroke is to make Supplier Connect available as an add-on to procurement software from SAP (Ketera is NetWeaver certified), Ariba or Oracle. Instead of asking prospects to rip-and-replace their current software, Ketera offers a means of addressing its shortcomings in the crucial area of supplier onboarding and updating, where most of the headaches occur. The low-risk, non-intrusive nature of on-demand delivery makes this a relatively easy initial sale. Of course, once customers have implemented the supplier management component, Ketera is quite happy to discuss extending it to other aspects of the spend management infrastructure — but that's a much easier conversation to have after taking the initial step rather than pitching the entire solution from the get-go.